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THE IMPORTANCE OF THE: “DATE OF SEPARATION” David L. Duff of Duff & Kronfeld, P.C. posted in Family Law on Friday, July 12, 2013.

Virginia’s divorce law, commonly referred to as “equitable distribution,” has as its ultimate goal the division of all marital property in a manner deemed to be fair to both spouses. In order to accomplish this eventual goal, it is necessary for a judge to first determine precisely what assets should be classified as “marital.” The single most significant aspect of such determination will be the date on which both parties separated and ended all marital cohabitation.

The equitable distribution statute (Code §20-107.3) defines “marital” property as being any asset acquired after the date of marriage and before the final separation of the parties. Any property/asset acquired, or money earned, after the date of separation, must be classified by the judge as “separate” property, and cannot be divided upon a divorce. This reality often leads to what I have referred to as “divorce planning.”

In most divorce litigation, the date of the parties’ final separation is often a hotly-contested issue. Consider this: One spouse is entitled to share in a percentage of the other spouse’s government or military pension, based upon the years of married, creditable service. However, the “married years” are deemed to have ended upon the date of final separation. Accordingly, delaying the actual date of separation has the effect of increasing the other spouse’s share of a pension.

Another frequently seen scenario involves the spouse who is due to receive stock, stock options or simply a pile of money from his employment. If these items are received before the date of separation, then unquestionably Virginia law requires that they be classified as “marital” property and fairly divided between both spouses. On the other hand, if the items were to be received after the parties had separated, then they would most likely be classified as “separate” property, and not involved in any equitable distribution.

Bonuses, commissions and salary earned by a spouse after the date of separation is regarded as being that spouse’s “separate” property. Therefore, if a spouse has a reasonable expectation of being awarded stock options, or granted stock, in his or her company, or is due to receive a sizeable bonus for a future project or promotion, it would certainly behoove that spouse, purely from a financial standpoint, to ensure that such stock, stock options or bonus arrives after the date of separation.

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